First reactions to Renewable Energy Act reform proposal

The centrepiece of Germany's Energiewende in the power sector is to undergo a profound revision this year. The government has tabled a draft law for the reform of the Renewable Energy Act, which has stirred a heated debate. The following is an overview of first reactions to the government proposal.

The Ministry for Economic Affairs and Energy is preparing a reform of the Renewable Energy Act (EEG), slated to take effect on 1 January 2017. The EEG, with its feed-in tariffs and priority access for renewables, is credited with enabling Germany’s renewables growth. A new system of auctions aims at keeping a steady hand on how much capacity is added each year and introduce market-based elements to support renewable energy investment. See a factsheet on the reform proposal here.

“Getting rid of auctions when they don’t achieve set targets”

In a comment on a leaked draft of the reformed Renewable Energy Act (EEG), green power provider Greenpeace Energy says that renewables tenders will make the energy transition less fair. Small actors and citizen cooperatives would be disadvantaged compared to large companies in the auction model proposed by the Ministry for Economic Affairs and Energy. Greenpeace Energy calls for a close evaluation of the first round of tenders and the option to reverse the reform if small, citizen-owned projects were pushed out of the market.

Energy expert Tobias Austrup of Greenpeace Germany warned that the “complete overhaul” of the successful EEG was endangering climate targets. Curbing future renewables development would not reduce the costs of the energy transition associated with installations built with feed-in tariffs in the first 15 years of the EEG, he said according to a press release.

Read the press release in German here and an overview of the EEG reform proposal in English here.

“No ceiling for wind power development”

The heads of Germany’s northern states have called for a consistent development of onshore and offshore wind energy, dpa reports. When reforming the Renewable Energy Act (EEG), the target of 40-45 percent renewables by 2025 should not be used as a ceiling for wind power expansion, Mecklenburg-Vorpommern’s state premier Erwin Sellering (SPD) said in Wismar. Together with the German Wind Energy Association (BWE) and metalworkers' associations, the state premiers are calling for a 2.5-gigawatt net capacity addition in onshore wind per year that must not depend on the addition of solar PV and offshore wind turbines.

In their “Wismar Appeal”, the BWE and the windy states also say the 40-45 percent renewables target by 2025 should not be an absolute ceiling. Greater demand for power in the heating and transport sectors as well as a 16 percent reduction in German power production due to the nuclear phase-out, means Germany needs more renewable power, unless this electricity was meant to come from fossil plants or imports.

In the interest of a steady growth that will keep industries profitable and jobs safe, there should be an additional two to three offshore wind farms per year (at least 0.9 GW capacity), the Wismar Appeal says.

“Auctions for wind power endanger citizen initiatives in energy transition”

The proposed EEG reform doesn’t provide enough exemptions for small, citizen owned renewables projects, three German NGOs, Germanwatch, WWF and Deutsche Umwelthilfe (DUH) said. This could endanger the acceptance of the energy transition, they fear. Agreeing with the “Wismar Appeal” of the wind industry and northern German states, the three NGOs believe that plans to implement auctions for all onshore wind farms larger than 1 megawatt (MW) will limit citizen participation due to high initial planning costs and risk premiums. Even today, many wind turbines had an average capacity of 2-3.5 MW, they said. The EU Commission had said it would be possible to exclude projects smaller than 18 MW from auctions, the NGOs wrote.

The organisations further say that making the expansion of onshore wind dependent on the actual deployment of other renewables was hindering planning security and curbing the expansion of the most cost-effective renewable energy.

“EEG amendment gives rise to growing uncertainty in the industry”

Although onshore wind showed a healthy development in 2015, the industry is alarmed by the growing uncertainty generated by the planned EEG amendment, according to the German Engineering Federation (VDMA). “For the manufacturers, quantity control by means of tendering is in principle suitable for organising further competitive expansion. The EEG 2016 contains good suggestions for securing leadership in innovation, export success and industrial production in Germany," said Matthias Zelinger, managing director of VDMA Power Systems. "It is however not right to regulate the expansion of renewable energy production by controlling the tendering volume for onshore wind energy and inflexibly clinging on to a 45 per cent target in the electricity sector.

"The expansion of wind energy on land would, according to the EEG draft, be managed by means of annually varying volumes. Such a variable low-level path for expansion would have serious consequences for Germany as a technology base. We demand that the expansion is stabilised and levelled out for a period of 10 years. We also expect the government to orient itself on the expansion path in EEG 2014. It also makes sense that EEG 2016 is defined parallel to the Climate Protection Plan 2050, so that they both contribute to achieving the goals in other energy sectors and for climate protection”, said Zelinger.

See a CLEW dossier on jobs and businesses in the energy transition here.

Die Linke / EnKliP

“Government favours offshore wind and large investors in new Renewable Energy Act”

Government plans for the reform of the Renewable Energy Act will make the Energiewende unnecessarily expensive, according to a study by consultancy EnKliP commissioned by left-wing opposition party Die Linke. “The government’s current plans limit cheap onshore wind energy in favour of relatively expensive offshore turbines,” the study says. It is still possible to achieve a target of an average feed-in tariff of 12 cents per kWh, but it would require faster expansion of cheap onshore wind and solar energy. “This would imply abolishing the lid on renewable development of 45 percent of power consumption by 2025.”

“Christian Democrats oppose energy minister’s renewables law”

Energy politicians from the CDU (Christian Democratic Union) party believe a reform of the Renewable Energy Act (EEG) as proposed by Economy and Energy Minister Sigmar Gabriel (Social Democrats) will lead to a “cost explosion” for renewables support, Reuters reports. In a letter to chancellery minister Peter Altmaier, the group says Gabriel is planning a renewables share of 55 percent by 2025 while a target of 40-45 percent had been agreed on before. A higher share would increase costs, while the necessary north-south grid connection to transport green power would be finished in 2025 at the earliest, they say.